1. SALEEM AKHTAR, J.--The respondent a non-resident company is engaged in banking business. For the assessm ent year 1978-79 it declared an income of Rs. 24,92,361 in which the Assessing Officer made certain additions out of the profit and loss expenses and assessed the income at Rs.
2. 26,30,901 creating a tax liability of Rs. 1,08,416. A surcharge of Rs. 1,70,841 was levied on the tax payable by the respondent. The levy of surcharge was challenged by the respondent before the Commissioner of Income-tax (Appeals), which was accepted. The Department filed appeal before the Appellate Tribunal, but the order of the Appellate Commissioner was maintained. The department then filed an application under section 136(1) of the Income-tax Ordinance, and the following question has been referred for our consideration: -- "Whether on the facts and in the circumstances of the case the Appellate Tribunal was justified in holding that the tax liability or the tax payable is the requirement of working capital and was not liable to surcharge?"
3. This question came up for consideration in Commissioner of Income-tax v. Pakistan Tobacco Co.
4. 1988 PTD 66 where after examining the relevant provisions of law and authorities quoted in it, it was observed that the Tribunal was justified in holding that "Income-tax liability payable for relevant assessm ent year could be included for the purposes of working out retained income for levy of surcharge". The learned counsel or the parties have raised same contentions, which were raised and considered in the afore stated judgment. We respectfully follow the judgment in Pakistan Tobacco Co.'s case and answer the question in the affirmative.